The American rating agency on Tuesday announced an upward revision in India’s FY25 growth forecast from 7 percent to 7.2 per cent.
This positive growth trajectory for India contrasts with the global economic situation, as the US economy is gradually slowing down.
According to Fitch’s Global Economic Outlook report for June 2024, “Investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence.”
The growth is driven by a recovery in consumer spending and increased investment. Fitch also expects inflation to decline to 4.5 per cent by the end of 2024, averaging 4.3 per cent in 2025 and 2026.
The rating agency elaborated, “The Indian economy grew 8.2 per cent in the last fiscal year (2023-24), with a 7.8 per cent expansion in the March quarter.”
Recently, multiple financial institutions have revised their GDP forecasts for India. The International Monetary Fund increased its GDP forecast by 30 basis points to 6.8 per cent, citing the strength in domestic demand and an increase in the working-age population.
The Reserve Bank of India, in its June Monetary Policy Committee meeting, revised the growth numbers from 7 percent to 7.2 percent, attributing the improvement to buoyant rural and urban demand conditions, supported by favorable monsoon forecasts.
The World Bank also revised India’s growth estimates upward by 20 basis points to 6.6 per cent in June, reinforcing India’s status as the world’s fastest-growing economy.
